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Opinion: Cement packers inspection may result in AMCU penalty to its initiator

INTERFAX-UKRAINEKyiv. September 14, 2010

Ukrcement Association’s initiative to inspect all cement packers in the Ukrainian market may be interpreted as a sign of anticompetitive concerted actions and lead the initiation to a material penalty imposed by the Antimonopoly Committee of Ukraine, supposed Sergii Koziakov, the senior partner of Volkov Koziakov & Partners law firm.
This was his comment to Interfax-Ukraine Agency on the relative application of Ukrcement Association to the Cabinet of Ministers of Ukraine, the State Committee of Ukraine for Technical Regulation and Consumer Policy (Derzhspozhivstandard) for conduct of such inspection aimed at detecting packaged counterfeit cement.
“Should the AMCU admit the violation of the Competition Law of Ukraine as a part of Ukrcement Association’s moves, it can decide to impose rather tangible penalty,” Mr. Koziakov said.
According to him, few applications will be enough for the AMCU to notice the situation.
As Sergii Koziakov highlighted, the aforesaid Association’s moves have signs of anticompetitive concerted actions as envisaged by the Law of Ukraine "On Protection of Economic Competition". He pointed out that the Law, inter alia, interdicts the restriction of production or commodity markets, technological development, crowding out of or restraint of other business entities’ access into the market.
Moreover, Mr. Koziakov believes such actions should also involve a substantial restriction of competitiveness of other business entities without reasonable grounds.
Reportedly, Ukrcement has recently filed to the Cabinet of Ministers of Ukraine and Derzhspozhyvstandard a request to inspect all companies packing cement in the Ukraine’s market in order to detect packed counterfeit cement.
The key point of the request is to include inspections of such packers into 2011 plan with funds to be allocated for that purpose.
In its turn the Association informed that if required it could provide the information on which firms should be inspected.
The Association was earlier reported to estimate counterfeit products in the Ukraine’s cement market in the approximate amount of 1 mln tones per annum.
Ukrcement Association was established in January 2004 through reorganization of Ukrcement Ukrainian Concern of Enterprises and Organizations of Cement and Asbestoscement Industry and became its legal successor. The Association comprises of 24 members-legal entities, among which there are enterprises producing cement and concrete, as well as repair and research & development enterprises of the sector.